Abstract Chrysler automobiles has experienced several problems in the recent past. The essay is a discussion about the challenges being encountered at Chrysler Group LLC. An analysis of the factors causing the poor performance has been done. The various strategies adopted by the company have been discussed. Recommendations for the possible solutions have been provided within the context of the essay. Introduction Chrysler Group LLC manufactures automobiles and was established by Walter Chrysler in 1925. Chrysler Corporation was created from Maxwell Motor Company after a re-organization strategy. Its headquarters are located in Auburn Hills, Michigan. Chrysler automobile provided distinct products which were engineered to meet the market demand. The prices of the products were affordable to attract a large demand from the growing market. Some of the innovations made during the early years of its foundation are the four-wheel hydraulic brakes, a road wheel with a ridged rim and a rubber engine. The innovations have been adopted by the auto industry in the world market. Maxwell Company was dropped in 1925 but most of the products manufactured by Chrysler were similar to those of Maxwell. Walter Chrysler became the first president of the company. The brands of vehicle manufactured by the company are: Chrysler, Dodge, RAM, Jeep and the Global Electric Motorcars (GEMCAR) (Schmidt, 2009). The company has experienced a turbulent path to achieve success in the market. It has merged with other companies as well as experiencing acquisitions from well established companies within and outside the country. Chrysler was part of the DaimlerChrysler merger in established in Germany. However, the merger failed and each of the two companies established themselves separately. Chrysler sold its shares to Cerberus Capital Management in 2007 but Daimler continued to own 19.9 percent of the shares of the company. Later in 2009 Daimler AG sold its 19.9 percent shares to Cerberus Capital Management at a price of $600 million. In 2009 Chrysler LLC filed for bankruptcy protection. It also created a partnership with Fiat, an automobile company based in Italy. Chrysler has received government support to implement most of its strategies. However, the company continues to perform below the expected level. For example, in 2009 the Federal Government issued US$6.6 billion to the company to finance the strategy of selling assets of the Chrysler to the new Chrysler. This strategy was made to protect the company from restrictions caused by the bankruptcy order the company had received (Schmidt, 2009). The total sales of the company products in the American market have been declining since 1999. US $2,638,561 amount of sales were made in 1999 while the sales in 2010 (January-March) is $234, 215 (Chrysler Group LLC 2010). The company recorded a positive change in sales in 2004 and 2005. The market has become very competitive as more companies enter the market. Competition in the market has intensified through the introduction of differentiated products. Chrysler tends to lag behind in its efforts to manufacture products which match the market demand. The management of the company has become inefficient in establishment strategies which will place the products in a strategic position in the market (Schmidt, 2009). Thesis statement Chrysler Company has experienced a lot of challenges in establishing strategies to exist in the turbulent economic condition as well as maintaining its competitiveness Cultural problems in the DaimlerChrysler merger The merger between Daimler AG and Chrysler Group was forecasted to be very successful. The two companies had a good history of performance in the market and the merger would increase the competitiveness of the companies. Daimler AG is an automobile company based in Germany. It is well known for its Mercedes products which have achieved a good brand image in the market. Chrysler is based in US and has dominated the US market for a long period of time. The merger between the two was done to increase the market as well as expand the production capacity of the two companies (Yost, 2003). The merger never lasted for long before it failed due to lack of proper analysis of the cultures of the two companies. Cultural differences between the employees of the two companies caused the failure of the merger. The German have the culture of informal operation of activities while the Americans are too formal. This created a conflict between the management of the two companies, for example, the Americans emphasized on the use of official attire within the premises of the company. The Germans were flexible since they accepted transfers to the US based company. The Americans were resistant and never accepted the transfer out of US to Germany. This created a lot of conflicts between the management of the two companies (Schmidt, 2009). The causes of the failure of the strategy were poor communication between the management and the employees. The strategy to merge the two companies was not well established and the cultural differences were not resolved amicably. All the stakeholders were not consulted when establishing the strategy and this resulted into conflicts between the affected parties. Most of the changes were established by the management without forecasting the effects of the merger on the culture of the employees and other stakeholders. Daimler AG has completely separated itself from the activities of Chrysler. The merger existed from 1998 to 2007. Most of the goals of the merger were not achieved and Chrysler continues to experience more problems with the management (Schmidt, 2009). Employee and customer responsiveness Poor management of Chrysler has resulted to poor responsiveness of the needs of the employees and customers of the company. The management of the company has not involved the employees in decisions about strategies to be adopted by the company. This has affected the implementation of strategies established by the management. Poor employee/management relationship has been caused by communication breakdown between the two groups (Schmidt, 2009). To establish a competitive advantage in the market will require the company to focus on the needs of the employees. Employee involvement initiatives should be introduced to involve the workers in the decisions and management of the company. Such initiatives will improve motivation to workers within the company. Leadership within the management should be embraced to enable the top management influence the employees to contribute willingly to the goals of the organization. Leadership should also be encouraged among the employees. This will improve the performance of duties as well as encourage employees embrace the goals of the organization (Yost, 2003). The customers of the company are not consulted in the decisions about the products produced by the company as well as other strategies being adopted by the company. This has resulted into introduction of brands which do not match the market demand. The marketing strategies adopted by the company are not focused to the needs of the market (Fitzgibbon & Seeger, 2002). Research into the prevailing market demand should be done to establish the current demand patterns. This strategy will help the company manufacture products based on the needs of the consumers. Consumer loyalty is a strategy that the company should aim to achieve. Consumer loyalty refers to the behavior of the consumers to re-buy products form the company. Chrysler should focus on improving its brand image in the market. This strategy will create loyalty among the consumers of its products. The management of the company should aim to win the market share since the competition is very high (Fitzgibbon & Seeger, 2002). Feedback systems A 360 degree feedback system should be adopted by Chrysler to measure internal and external stakeholder satisfaction. The feedback system focuses on all aspects of the items being analyzed. The internal stakeholders include the employees and management. The external stakeholders include the suppliers, customers, the government, and the community. Collecting feedback about the levels of satisfaction by these stakeholders will enable the company assess the strengths and weaknesses of the internal systems as well as the opportunities and threats in the external environment of the organization (Schmidt, 2009). Responsiveness to the environment Chrysler has encountered the problem of learning the internal and external environments. Thus, the company has become less responsive about the changes in the environments. The automobile industry has been flexible with new products being introduced. The demand is shifting rapidly. However, the company has done little to embrace the changes in the market. Organizations become more responsive to the changing environment through research about the changing internal and external environment. Chrysler should adopt a system of analyzing the internal and external environmental factors. The company needs to assess the changes in the market trends to produce products which match the demand of its customers. The employees should be assessed on a regular system to ensure their needs are being fulfilled (Fitzgibbon & Seeger, 2002). Leadership strategies To solve the problems facing the management of the organization, leadership strategies should be adopted to improve employee performance. Efficiency in the production system has been a major challenge to the company and in most cases the costs have exceeded the revenues generated from the business activities. The company has high labor costs to maintain the high wages paid to the employees. The organization should focus on maximizing the outputs and minimizing the costs. Teams need be established within the organization to group the employees and maintain professionalisms as well as developing the skills required to perform specific tasks (Schmidt, 2009). New leadership strategies that are suited to Chrysler are the leadership within the employees and the management. Leaders are found in all sectors of the organization and the company should focus on developing leadership within the employees and the management. Leaders are the people who are able to influence others to contribute to the goals of the organization. They can be at the management positions or at the junior employee level. Chrysler should encourage the employees be creative to bring about innovations. Leadership among the management creates the ability of the top management influence their juniors to contribute to the success of the organization without the use of the established bureaucracies. Leadership creates followers since the role of the leader is to show the appropriate direction to be followed (Schmidt, 2009). Chrysler should introduce change management systems within its operations. The organization is undergoing numerous changes within a very short time. If not well managed, the changes may cause breakdown of the normal operations of the company. Leadership enhances appropriate change management strategies which enable the followers become effective in their activities. The leadership of the company should ensure the stakeholders undergo a successful transition. Change management team should be employed to create a system of adjusting the factors within the organization to match the changes being adopted by the company. This team provides the management team with ideas of adjusting the resources whenever new systems are being introduced (Fitzgibbon & Seeger, 2002). Entrepreneurship strategies need be implemented within the system of the organization. Risk taking is required to be implemented in the management of the activities of the organization. Calculated risks create opportunities to create new ventures which place the company in a competitive position. When the employees are encouraged to take risks, they become innovative and they introduce ideas which are efficient. The existing system of Chrysler should be abolished. There are many bureaucracies in the management of resources. This has been a barrier to risk taking, invention and innovation. The management has placed many barriers to establishing new ideas (Fitzgibbon & Seeger, 2002). Communication systems Communication between the management and the various stakeholders has been very poor. The stakeholders are not informed the strategies of the organization. This system has created conflicts between the management and the stakeholders since the strategies adopted fulfill the interests of the management but do not reflect the needs of the stakeholders. To solve this problem effective consultationb between the management and all the stakeholders should be done to ensure the decisions followed by the organization match the interests of all the people affected (Schmidt, 2009). Modern system of collecting information from the stakeholders is the Enterprise Resource Planning system. Through this system the organization links all the people and organizations which may be affected by the decisions of the company. Data is collected about the suggestions for change to the system of activities. The organization collects and analyzes the information obtained from the employees, customers and all other stakeholders through the ERP system. Chrysler should integrate all its stakeholders by establishing an ERP system which involves the use of a computer software and hardware to link all the people affected by the decisions of the company (Yost, 2003). Conclusion Chrysler has experienced a lot of challenges as it strives to exist in the turbulent economy. There have been a lot of competition in the international market and strategies to create a competitive advantage have always failed. Poor examination of the cultures of Daimler and Chrysler resulted into conflicts leading to the failure of the merger. Consumers are responsive to products which match their demand. Strategies to improve the relationship between the employees of Chrysler and the management should be embraced to create a good work environment. Analysis of the internal and external environments will provide with a feedback about the satisfaction levels of the various stakeholders of the company. Chrysler has experienced poor leadership strategies within its systems. This has caused the establishment of policies which do not reflect the actual situation of the company. Communication between the stakeholders of the company has been a barrier to the achievement of the goals of the organization. The company has established policies based on the interest of the management without considering the decisions from all other people and organizations with an influence on the activities of the company. Entrepreneurship skills should be introduced within the management of the resources of the company. More innovative ideas are required in the company to introduce competitive products.
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